The Dutch Are Betting on Blockchain for Their Financial System

Is the Netherlands equipping itself to be the next big innovator in the blockchain world?

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De Nederlandsche Bank (DNB), The Netherlands’ central bank, is all set to support a new ‘blockchain development campus’, which will enable banks to develop and share information regarding the use of blockchain, the distributed ledger system behind Bitcoin.

The lowlands country has even appointed a new ‘Fintech Ambassador’ Willem Vermeend, a professor of Economics and a former minister of Social Affairs and Employment. He is expected to play the role of a bridge between the government, the fintech sector and the regulators.

Everyone needs to work together

In order to facilitate learning and sharing of information among banks and other financial institutions, the DNB will open a campus in September.

Co-operation is certainly on the agenda as the Fintech Ambassador of the Netherlands Willem Vermeend told the Dutch daily De Volkskrant that while there is creativity in the Netherlands, the problem is that there are twenty parties (working on blockchain) who have no idea what the others are doing.

As an example, ABN Amro has already deployed a team of 30 people to look at the possibilities of using blockchain-like systems within their bank. Rabobank too has signed up to a partnership with NexusLab to explore further possibilities.

DNB has a finger in the fintech pie

This is not the first time the DNB has toyed with blockchain, In June, DNB’s head of market infrastructures policy department, Ron Berndsen, had revealed details about the central bank’s experiments with its own experimental currency called DNBcoin.

In a speech given to the Dutch Blockchain Conference on June 20, 2016, Ron Berndsen revealed:

“So last year we started our DNBcoin experiment. The general idea was that by adapting the Bitcoin software ourselves we could learn deeper how an actual implementation of the blockchain really works than if we would only perform desk research and go to conferences such as these, no matter how interesting. And just to avoid misunderstandings: the DNBcoin is only developed for internal test purposes, it will not be put into circulation.”

Why are central banks interested in blockchain

The DNB is not the first central bank that is playing with blockchain technology. We previously reported that the Indian Central Bank, The Reserve Bank of India is exploring blockchain to curb the use of cash.

Bank of Canada and The Bank of England too have announced that they will look into blockchain as technology to achieve various ends. In the future there is a very real possibility that all money will be virtual and it is not surprising that central banks do not want to be left behind in the game.

The possibilities that the Blockchain technology offer are endless and it is best put in the words of Ron Berndsen of DNB who concluded his speech by saying:

“History teaches us that when looking ahead into the distant future, it is wiser to predict that something is possible, rather than that something is impossible. The blockchain technology offers a number of advantages over existing technologies. But there are also some drawbacks and barriers to overcome.”